Valve Bullying Cybercafes Over Licensing?

The Importance of writes "Yesterday, as mentioned on Slashdot, Valve announced arrests relating to the theft of Half-Life 2 code. Gabe Newell, Valve's CEO, was quoted as saying, 'Everyone here at Valve is once again reminded of how much we owe to the gaming community.' Demonstrating its appreciation of the gaming community, Valve also threatened to sue a cybercafe offering Counter-Strike without the correct licensing. This may sound fair enough, but while companies like Microsoft allow cybercafes the right to offer games as long as they buy each copy of the games they use, Valve has what are generally considered the worst cybercafe licensing terms there are. Moreover, instead of merely sending a cease and desist letter ('knock it off or we will sue'), Valve sent a ' pay us big bucks for a license or we'll sue letter'. In other words, unless the cybercafe prepays for a one-year license starting at the time the letter was received, they will be sued."

Comments

Bullying? I Think Not.

[illuminata]

This guy is running a business for Christ's sake. He should have known the score beforehand. The fact that this person is ignoring the legal side of things while running a business is stupid no matter how you look at it.

Frankly, I don't feel sympathetic for this person at all. They're running a cybercafe; getting the licensing issues out of the way should be top priority for them before they allow the game to be played. That "poor, pitiful me" shit doesn't fly here. If they didn't know the ins and outs of their business before they got in it, they shouldn't be in it now.

Valve did no wrong here. Hopefully something good will come out of this; Valve will show this person that they should stick to being an employee.

Re:Bullying? I Think Not.

[dubious9]

From the article:

Should you demonstrate to our satisfaction the number of seats you have been using and presently need licensed and if you enter into a pre-paid, one year commercial license agreement with Valve for that usage, Valve will consider this matter resolved and will not pursue any claims it may have for past infringement of its software products in regard to their use at your establishment.

The point that they do not simply have the option to stop offering Counter Strike. They have to buy a license if they don't want to get sued. Maybe the guy made a mistake and thought they just by buying 40 copies of half-life and putting them on his computers was enough.

This was a reasonable position given that:

...with companies such as Microsoft offering licenses through cybercafé organizations like iGames such that as long as each copy of a title is legitimately purchased, cybercafés may use them.

Yes he profited from using Half-life and the free CS mod, and yes he should have made sure that all of the licensing was correct. But as a company with large community of followers, why would you want to seed mistrust as a money-grubbing corporation to some shmuck who didn't know he needed a different license?

If he wants to keep using CS, then he should get the license, but he should have the opportunity just to stop offering it (if he had accuired the copies legally), as it could have been just an honest mistake.

Of course there could be more details to this case that shine less favorable on the cafe, but forcing someone to buy a license or risk law-suits doesn't exactly ring as a nice thing to do.

Re:Bullying? I Think Not.

[Anonymous Coward]

Furthermore they seem to be cornering him in this fantastically worded acusation:

As you know, the retail versions of Valve products are not intended for, nor are they licensed for, commercial exploitation (such as use in a cyber café/LAN center). Unauthorized duplication and use of computer software products constitutes copyright infringement.

If he says that he legitimately bougth separate copies, they can counter that he knew that this was insufficient as they lead off with "As you know...". An a priori acusation, if you will, that carries insinuations both ways. Much like the statement: "Have you stopped beating your wife?" Insinuates you have been beating your wife whether you have or not.

If he did not buy the copyies they not only nail him with "commericial exploytation" but with copyright infrigement as well. This is important since the commercial exploytation has less legal ground to stand on.

Las Vegas used to have Super Bowl parties where you paid admission for food&drink to watch the game. Since the NFL saw it as selling tickets to watch the game, they threatened legal action if a licensing agreement wasn't worked out and if they continued. But the NFL didn't threaten to sue unless they bought a agreement. Vegas had two non-lawsuit choices: stop or pay.

In conclusion, if the cafe owner wasn't acting in bad faith (copyright infrigement) and simply wasn't aware of the restrictions (EULA's have yet to be desively tested in court(IIRC)), it will be hard to successfully sue if he shows that he has stopped using their software.

Re:Bullying? I Think Not.

[illuminata]

I don't think that this was necessarily a nice move in business, but it is business; you can't always be nice. This guy might not've known about how to license, but he really should've. If this was, say, a one-time fee-based lan party that some college kids threw and they get this letter, I'd be pissed off with Valve too. In that case being unknowledgeable about licensing schemes could very well be a legitimate excuse. However, we're talking about a place that is out to sustain profit and operates regularly. A place that should have known better.

I think that the bigger question, the one that Valve is probably asking, is: How could they not know?

If this person truly didn't know, they should've went to Valve first and try to work something out regardless of what stated in the letter. If Valve acted like a jerk in response then you could let it go to court and hope for leniency there. But this should be a very important lesson to them; know what you're doing first.

I'm guessing that Valve doesn't see this guy as some schmuck. His site design might make you think so but check out the pictures as well. He seems to have a good handle on that end. When it comes to something like a gaming center, it's not unreasonable at all to expect that they have their licensing issues settled before allowing the game to be played. If they knew enough to get a T1 line (as stated on their site), set up a lan, and run a for-profit business, making sure that you can do so legally isn't too much of an expectation. Valve probably felt that this was a glaring enough issue that a reasonable business would know to have it settled beforehand either by their own good sense or by a lawyer's. And, therefore, not taking care of the issue could only be in bad faith (yes, I read the AC's response to your post).

If this person was truly stupid enough to not find out that he needed a special license beforehand, than anybody remotely close to him, anybody who has an ounce of compassion for him, should force him to close up immediately. I just don't buy that he's that stupid when he's in the business already.

Being a game center owner...

[MongooseCN]

Since I'm about to open a game center this month, I have been following this issue closely. Valve has always been a sketchy company. They offer poor to non-existant support for their products. Their products run poorly (anyone use Steam lately?). As for licensing, they have been backtracking and restating information about the license program. After seeing all this, I refused to carry Valve games.

As for other centers... Intially when Valve came out with the new license, everyone found it ridiculous and continued running their centers as usual. A few spokesmen for Valve said that if they continued with the licensing scheme, they would issue cease and desist orders to any center using their games and not paying the license fees. So game centers would be allowed to remove the games to avoid legal action. Most game centers figured they would continue running the games and, in the worst case, be forced to remove the games.

A year or so went by with no change in Valves statements about enforcing the licenses.

Valve suddenly decides, out of the blue, to issue lawsuits to all game centers with CS. Instead of issuing the cease and desist order like they said though, they decided to force game centers to pay for a yearly license. That's about $2400-$3000 up front. That's painfully difficult for most game centers which barely break even. A typical game center makes around $500 a month in profit. 99% of game centers are mom & pop shops run by 1 person and 2-3 employees. They generate little income.

Personally, I think Valve downplayed the licensing issue to get as many centers using their software as possible. Then they attacked all the centers to force them to pay license fees or be sued out of existance. Kind of like MS's policy of allowing foreign countries to pirate their software. Then when lots of people have the software, threaten legal action and create a huge new revenue stream. I am no longer supporting Valve products.

Re:so.. what kind of cafe licensing does valve wan

[gl4ss]

Apparently he thought that just buying the games from a shop would have been enough. *bzzz* wrong in this case. on top of it valve didn't originally have this licensing scheme in place(I'd suppose they didn't even except half-life to grow so fast due to a community made mod named counter-strike), instead, they have instituted this later(changed the 'contract' afterwards the 'deal' was made to purely their beneficiary).

I don't suppose you sell your programs to people with a license to use them and then when they get widespread(legal) usage you tell them that hey, you have to pay yearly for that! - this was what I was disputing of being possibly non enforceable by them.

In the end of the day they are allowed to be stupid, true, but that doesn't make it right either. They have to make some unbeliviable progress with cs2 and hl2 to keep their community on the level it used to be(cs community is already breaking into shards because of widespread cheating and the engines total inability to cope with it)..

The story behind the story

[Anonymous Coward]

In the world of commercial game licensing Valve stands alone for being one of the most difficult and unreasonable developers. Valve is inflexible, unwilling to listen, unwilling to compromise, and shrill in their approach to game centers; the same game centers that are responsible for keeping for so many years the interest of players in their jewel game: Counterstrike. A game center is a powerful tool for developers and publishers to deliver their content directly to the customers who matter most: gamers. Many game publishers understand the strength and penetration of this marketing channel and have developed commercial use policies that are much more favorable to game centers. Their policies serve to promote their games and create an environment where game centers are enticed to continue to support the games and the customers' interests by facilitating a variety of competitive events on local, regional, and national levels.

Operating a gaming center is no small task. There is no single-point licensing scheme like there is in music industry. The variety of fragmented game licensing schemes makes for a difficult operating environment and drives up overhead. If Valve succeeds in forcing game centers to pay unreasonable fees to use their software, how long will it take for the other publishers to demand the same thing? Imagine each publisher demanding $3000/year for a game title. If an average gaming center carries only 10 game titles, the total price for just making the games available to the customers will be a staggering $30,000/year. What if there are 20 titles? That's $60,000/year! Most gaming centers don't see that kind of money in an entire year. Forcing game centers to pay these fees will most certainly destroy the gaming center industry in the United States.

Valve

[Hard_Code]

It's fashionable to bitch about Valve and Steam, but Steam is a great system, and Valve has been great to its community. First off they hired Bram Cohen, the Bittorrent author, so they have serious technical chutzpah under the hood. Secondly, for a SEVEN YEAR OLD GAME I bought once for like $30-50, I have in my game list: Counter-Strike, Day of Default, Half Life, Team Fortress Classic, Death Match Classic, and Opposing Force, all games produced by Valve, for, you guessed it FREE. That is not to mention Ricochet (which is pretty useless) and tons of other mods I have (Natural Selection being probably the best). Now with these FREE games I get: A builtin server browser, a friends list, and guess what FREE UPDATES. Mod authors also get a channel to deploy their mods. For now it is, um, FREE, but they will in the future be able to license their games. Now for me, Joe Freeloader, that's not so great, but for mod authors that kicks ass. Where else has a company said: well, you're making a great mod for our game, you know what, we'll let you sell it, in OUR distribution channel on OUR bandwidth!

I think that is a hell of a lot for some piece of software I bought 7 FREAKING YEARS AGO. I think that is a pretty good deal. And if they perhaps want to get a cut from somebody else making profit off THEIR distribution and update system, that seems ok to me. I don't know the details of this particular incident, and perhaps Valve could have been more tactful, but Valve in general has been GREAT to the community. They even run forums wherein every luser on earth gets to post: "St34m 4re t3h suks. I h4te you. G1ve m3 m0re g4mes b1tch. kthxbai."

Valve's "games"

[superultra]

I'm amused by the comments here, mostly about Valve protecting "their games", or about how Valve has a right to protect "their" intellectual property.

Let's get this straight: Valve has made one game. One. Not two, not three; one. How many people out there are still playing the single player game? Because that's all Valve has ever done. Even Steam, which is the second (or first) coming of the Messiah based on what you'd read here, was mostly developed by hired people from outside of Valve. Counter-Strike was not even an intentional gamble on behalf of Valve. It was a completely random lightning strike, lady luck smiling on Gabe Newell and friends. Counter-Strike, and the community that surrounded it, are the only reasons Valve has the power to hire lawyers expensive enough to bully around these gaming centers. Valve exists, now, because of chance and luck, solely because of the efforts of other people. If it weren't for Counter-Strike, a game designed altogether by other people (and for free), Valve would've forced the same pressured deadlines as any other developer so that they could feed their families. They haven't had to deal with that because of the efforts of gamers, and they have the nads to do stuff like this? We don't even know if Valve's sophmore effort will be any good.

They've outright lied to the gaming community (September 30), they pull stunts like this, and like an abused wife we keep coming back. Why do we keep kissing their ass?